behavioural biases of japanese institutional investors strongfundstrong.pdfVIP

WIF-04-004 Behavioural Biases of Japanese Institutional Investors: Fund Management and Corporate Governance Megumi Suto, Masashi Toshino 2004-07-23 Behavioural Biases of Japanese Institutional Investors; Fund management and Corporate Governance Megumi SUTO, Waseda University, Tokyo Japan Masashi TOSHINO, Daiwa Institute of Research, Tokyo Japan Abstract: This study examines the behavioural biases of Japanese institutional investors and discusses implications for their role in corporate governance, based on the findings of a questionnaire survey of fund managers carried out in 2003. Statistical analysis of the survey results reveals a short-term bias in fund managers’ investment time horizons, herding, and self-marketing to improve the appearance of portfolio performance under the pressure either of customers or of institutional restraints. We conclude that institutional investors‘ behaviour contradicts their role as shareholders. Keywords: Institutional investors, fund management, investment time horizon, herding, self-marketing, corporate governance We would like to thank Chuo University for its financial support for our questionnaire survey on Professional Asset Management. We are also grateful to the Daiwa Securities Research Institute for its valuable assistance in sending our questionnaire to Japanese institutional investors. Thanks to